Key Findings Details

We find that implied Internal Rates of Return (IRR) used by our older respondents to discount future payments is 0.54.

IRRs rise with age, such that a 15-year increase in age from 70 to 85 would be associated with about a one standard deviation higher IRR.

Whites and the better-educated have lower IRRs, while people with serious health conditions implying reduced life expectancy have 11-30 percent higher IRRs. Also IRRs are 35 percent higher than average for individuals diagnosed with a cognitive condition (dementia or Alzheimer’s).

Net wealth is significantly lower for the least patient individuals. Additionally, the impatient are much less likely to engage in healthy behaviors and make little provision for end-of-life challenges.